Complete Guide to Financing Your Firearms Purchase

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Gun sales in the U.S. are big business. In 2013 alone, the industry manufactured around 4.5 million pistols, 700,000 revolvers, 4 million rifles, 1.2 million shotguns, and 500,000 other types of firearms.

While the average firearm can cost as little as $500, the costs involved in buying and owning a gun can add up quickly. In fact, a good rifle is likely to cost a few thousand dollars and the expenses involved in buying a gun include things like the cost of a gun permit (which can be as much as $900 in places like Chicago), ammunition, hearing protection, eye protection, gun safety classes, cleaning supplies, servicing, and a gun safe.

That’s not even considering the costly expense of more high-end guns such as the TrackingPoint Precision Guided firearms, which retail for tens of thousands of dollars. Specialty firearms and collectables can range anywhere from a few thousand dollars to hundreds of thousands of dollars.

Added up, these expenses mean that obtaining financing for guns is critical for many buyers – depending on their financial situation and the cost of the gun they want to buy.

Here is a breakdown of the different options when it comes to financing your gun purchase.

Industry Financing

While most gun dealers offer a layaway option on their guns, if you want to take your gun home today you can likely find a dealer who has gun financing available.

This financing usually comes through a partnership with an outside lender. These loans often require customers to pay a portion of the gun purchase as a down payment which is usually between 15% and 25% of the total cost. They also often give you an interest-free period of anywhere from 60 to 90 days.

Generally, these financing offers are installment loans that give you anywhere from 6 to 18 months to pay off the cost of your gun and can provide you as much as $10,000 in financing. One of the drawbacks of these types of financing options is that they often charge high-interest rates starting around 10% and going as high as 30% or more. They also often have a number of fees that you’ll have to pay to apply for and get financing such as application fees, administration fees, pre-payment fees, and origination fees.

Many types of gun industry financing options do not perform a hard credit check on you which means that you don’t get to take advantage of your good credit if you have a high score, but if you have a low score that might make it easier for you to qualify for financing.

Personal Loans

Personal loans are likely going to be your best option when it comes to financing a firearm because you’ll be able to choose a loan that is right for you. You can shop around and look for lenders that will offer you the best deal given your financial situation, your repayment preferences, and your credit-worthiness.

If you have a high credit score, you’re more likely to get better terms and rates. Even if you don’t have a high score, you can shop around and likely find a lender who will give you a loan at a reasonable rate.

Interest rates on personal loans vary greatly based on creditworthiness and other factors and typically range from 3% to 35%. Repayment terms typically range from 2 to 5 years depending on the borrower’s preference and the lender.

Assuming an interest rate of 10%, a 2-year term length for a $1,000 personal loan would cost a borrower a total of $1,107 with monthly payments of $46.14. A 5-year repayment term would cost a borrower $1,275 with monthly payments of $21.25.

There are also a number of lenders specializing in personal loans that don’t charge application fees, administration fees, origination fees, and pre-payment fees. That means that you will save significantly since those costs add up. With quick online applications from most lenders and quick payment once you’re approved – you can very quickly get your personal loan funded and buy your gun.

If you are interested in taking out a personal loan for a firearm purchase, check out our guide to the best personal loans.

Credit Cards

While putting your gun purchase on a credit card is an option when buying a firearm, the interest rate is likely to be quite high. While it could be lower than the interest rate you would get if you used industry financing, a personal loan will likely offer you a lower rate.

Bottom Line

While a credit card might seem like an easy option or you might be lured by industry financing deals offering no interest on the first 60-90 days of your gun loan, you’re likely better off getting a personal loan to finance your gun purchase because it will offer you more options on your repayment, fewer fees, and potentially a much lower interest rate.

Jeff Gitlen is a graduate of the University of Delaware. He writes about a wide range of financial topics including student loans, credit cards, small business financing, and more. His work has been featured on a number of sites including Bloomberg, CNBC, Forbes, Market Watch, and more.

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